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Things to Consider for Operational Excellence

By Ted Margison – Excerpt from the book, Cracking the Business Code

[dropcaps type=”circle” color=”” background=””]T[/dropcaps]his section was going to be “8 Things to Consider for Operational Excellence”. The good news for you: there are only two things to consider.

Better Visibility Provides Better Results

A supplier of protective gear was struggling to meet demands. “We have tried everything over the past couple of years but nothing works. Our turns are less than 1 and we still can’t fill demand. We’ve been selling size 10 and 11 boots the last couple of years and now a customer needs size 13. No matter what we stock, it doesn’t seem to be the right thing; it’s like a guessing game.”

While I was in the General Manager’s office, he received a very angry call from the CEO of a very large customer. Without proper protective gear workers could not work – the downtime on one of their lines cost them about $100,000 per day.

Obviously, the current decision-making processes were not effective; something was missing. We mapped the decision-making processes to find the “blind spots”. These are decision points that are not fully understood or assumptions have been made about them. The blind spots in this case were the decision-making processes of customers. In particular, what drives demand.

We interviewed the top 20 customers and found that demand was driven by two things: replacement of worn-out items and new hires. For replacement we realized that we could predict product life-expectancy based on job position and work environment characteristics. We proposed to the customers that we would gather and consolidate data across customers on job positions and work environment characteristics to predict life-expectancy and then automatically reach out to replace the items. For example, if a product had a life-expectancy of 36 months for workers in a particular department, we would do an inspection at 30 months and replace the item before it wore out. “New hire” demand was primarily “large scale” – new plants being opened, new mining projects. We identified a simple way of inserting ourselves in the hiring process to identify the best-fit product based on job position and work environment characteristics.

The customers were so excited about the recommendations that five of them offered, each, to pay half the cost of any system effort. Some offered the opportunity to bid on business that was going to competitors, while others simply switched their business from a competitor. As one customer said “We no longer have to worry about these decisions – you are making them for us. The cost of these products is far less than the cost of downtime; why would we talk to anyone else.”

Another company was about to make a strategic decision that would have serious operational impact. “We need to move to same-day shipping to get a competitive edge. Our customers buy when something breaks so we have to be able to respond quickly”, said the Sales Manager. The company had recently moved from 5-day turnaround on orders to 2 days and inventory had climbed to the point where turns hovered around 1.2. Moving to same-day shipping was going to be a major challenge.

In order to better understand the buying process for customers we interviewed the top 20 customers. Surprise: All could give at least three months notice on demand; one could give 12 months.

“Why do you give us only 2 days notice”, the CEO asked.

“Because that’s the lead time you gave Purchasing.”

We found some quick and easy ways to get this advance notice and in just a couple of months we were buying ‘to-order’ for these customers. We also approached supplier offering the advance notice. The VP Operations for the largest supplier (a company whose typical customer was 40 times our size) said “If you give us this advance notice you can order anything you want up to end of the day on Friday and it will be on the truck Monday morning.”

In less than a year inventory turns reached 7.3. Shortly afterward, the company went on to acquire a larger company.

To get better visibility you need to go beyond your operations to include customers, business partners, suppliers and other external organizations. Start with processes that are key to achieving your business goals. Map your current processes (goes as far upstream and downstream as possible):

• Identify decision points

• Find the ‘blind spots’ for decision-making

Who makes the decisions?
What drives their decision-making?

— Triggers?
— What are they measured on (what’s a win for them)?
— Are they ‘driven’ by others in their org (interview those people)?

Accountability

For internal operations this is probably the single biggest problem for companies. Almost every company feels they have a good handle on accountability – unfortunately, they are usually wrong. When things aren’t performing effectively it’s usually because no one is accountable for the performance.

A manufacturing company was looking at getting a new ERP system. The CEO had heard horror stories from various customers and was concerned about implementation.

“What kinds of things go wrong during an implementation?” asked the CEO.

“Well, a major problem in many companies is that accountability is not well defined.”

“Oh, that’s not a problem here. We’re a very lean organization and everyone understands what they’re accountable for,” replied the CEO. “But, just out of interest, can you give me an example?”

“Well, although it might not apply here, companies that have problems with inventory often find that no one is responsible for inventory accuracy.”

“That’s not an issue for us. Dave, tell him who’s accountable for inventory accuracy.” said the CEO, nodding to his COO.

“No one,” replied the COO. “Maybe that’s why we have a $14 million inventory discrepancy.”

Effective accountability covers ownership, span of control, performance measurements and your reward/ recognition system.

Ted Margison is a Senior LCS Consultant and has over 30 years experience in operations management and process improvement. Ted worked for Ernst & Young in their manufacturing & distribution practice and then headed up one of PriceWaterhouse’s manufacturing & distribution practices on the west coast. You can contact Ted at ted@lighthouseconsulting.com or call him at 310-453-6556, ext. 422.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014
If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.
To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

How to Create a Closing the Loop Culture

By Dana Borowka, MA

In business jargon, “closing the loop” means to follow up on and/or close out an area of discussion. The phrase is closely related to “circle back around” and “loop in.” To better achieve your objectives, experts say it’s vital that you learn to close the loop on actions so that the important actions can get done.

The metaphor is from the closed loop control process that assures a system performs within its control limits. By closed loop, this means a process where the output of the system feeds back to directly adjust performance of the system. For example, a thermostat and a furnace work together in a closed loop to control room temperature.

Another example is the recycling world, where the closed loop system gets consumers, recyclers and manufacturers to work together to reclaim valuable materials from our waste stream and use them to make new products. For a graphic illustration on the “closed loop” idea, look on the bottom of a plastic soda bottle. The familiar chasing arrows recycling symbol is a graphic depiction explaining the concept.

“In business ‘closing the loop’ is akin to following up, checking in or closing the deal,” says Jarie Bolander, a writer for TheDailyMBA.com. “The term comes from control systems where they close the control loop in order for the system to remain stable. The opposite of a stable system is one that is unstable. In control system parlance, this is referred to as an open loop system since it has no feedback and thus will likely spin out of control — kind of like projects without any follow-up.”

Bolander is an engineer by training, entrepreneur by nature, and leader by endurance. He is the author of two books: One to help technical managers become frustration free (Frustration Free Technical Management); and one to help all of us endure our struggles and hardships (A Little Nudge to Keep You Going). He holds a BS in Electrical Engineering and an MBA in Technology Management. “A lot of us struggle to get stuff done because we have to rely on others,” says Bolander. “Unfortunately, this reliance is just part of doing business.”

According to Bolander, most of us in business have had situations where we thought someone would do something and it turns out they either forgot, ignored you or did the wrong thing. All of these issues are a result of not closing the loop. In order to save you from suffering and heartache, here are some steps from Bolander that will ensure that you close the loop every time.

Step 1: Have Clear Objectives

One of the biggest challenges with getting stuff done is understanding your true objectives. Nothing will frustrate you more than launching someone off on a task that is really time sensitive but is not communicated that way. Having clear objectives means that you think about what needs to get done and craft a plan that makes sense. The trick to this is to prepare carefully and nail down what objectives are important and who you need to do them.

Step 2: Communicate Clearly

Clear communication means that your message or task is registering with the audience. This does not mean you talk slow or use 4th grade English. Rather, you need to have points in your meeting or conversation where you query for clarity and that your message is getting across. Remember, that what you say may not be communicating the message you intended. That’s why you need to constantly listen to what people say and confirm that your message or task is getting across.

Step 3: Create Natural Follow Up Points

One thing that most people struggle with is how to follow up with someone on a task or assignment. This can be a challenge for some people because it’s unclear when to follow up. If you create natural follow up points, then all sides will feel a lot more comfortable in taking your call or email. These natural follow up points are created by the person that desires the action to be completed the most. A couple of examples of natural follow up points are:

♦ Taking the action to follow up in a week if you don’t hear from someone.

♦ Set a mutual deadline that everyone agrees to.

♦ Providing information or feedback before a certain date.

♦ A personal action to follow up with data/recommendations, etc.

♦ Providing a status update when something material happens (e.g. another deal closed, hit a milestone, etc.)

There are several other natural follow up points that will become obvious to you once you start looking for them.

Step 4: Document Discussions/Actions/Agendas

Probably the single best thing you can do to close the loop is to send out meeting agendas, notes, actions and conclusions. This may seem like a lot of work but it’s a great focal point for discussion. When you send out meeting notes, you are opening up a natural follow-up point that can be leveraged to close the loop on several actions. Without this focal point, all those dangling actions will have no home. Your meeting notes and follow-up on them will provide those actions a natural home.

Step 5: Follow Up When Promised

If you want people to promptly follow up on your actions, then you need to set the example. The tone and tenor of your follow-up coupled with your punctuality will show that you care about closing the loop and this will naturally rub off on others. Nothing tells someone that it’s important to close the loop like doing everything you can do to make it easy for them.

Step 6: Repeat Until Closed

Just because you ask someone to do something, does not mean they actually heard you or acknowledged that it will get done. This means that you have to repeat the above steps until you reach the resolution you want. This might take several meetings or phone calls. In fact, it might take longer than you anticipated. The thing to remember is that you must be diligent if you want something done. That requires you to constantly communicate your desired results and close the loop to make sure it gets done.

Often Closing the Loop Means Delegating

“The best delegating tip I have is to delegate to people’s strengths and away from their weaknesses,” says workplace expert Vicky Oliver, author of five books including Bad Bosses, Crazy Co-Workers and Other Office Idiots. “Otherwise, you are trying to force fit people into roles and tasks they don’t appreciate. Perhaps someone on staff is a great writer but a poor administrative person. Don’t force him or her to complete a lot of paperwork.”

Instead, says Oliver, look for someone else on staff to whom you can delegate that role. Another person on the team may be a good “people person”, but is disorganized. Find someone else in your employ to whom you can delegate the organizational duties.

“From a hiring standpoint, it really makes sense for managers not to hire those who are exactly like them, as there will be glaring weaknesses in the team that can’t be fixed,” says Oliver. “This can be counter-intuitive because we tend to bond with those who share our interests and sometimes duplicate our strengths.”

Rather than look for clones, use an in-depth work style and personality assessment to improve hiring success. While an assessment can be a valuable resource before you hire, perhaps the true value of any assessment comes in using the insights it provides along the entire spectrum of employment. Assessments lend objectivity to decisions that may otherwise be largely subjective.

A proper assessment should reach beyond simple profiles and decipher an employee’s underlying needs. This is key for employee development, team building, conflict resolution and succession planning.

Create a Closing the Loop Culture

Below are five ways to use an in-depth work style and personality assessment in the workplace to help bring out the best in your employees at all levels in an organization, which can go a long way to creating a “closing the loop” culture.

1. Get the real picture. Of course, every candidate wants to put their best foot forward during an interview. However through an in-depth work style and personality assessment, you uncover a great deal about their ability to work well with other personalities, their problem solving abilities, their thought processes and their ability to tolerate stress. Assessments give you objective information that can help you make an informed decision on whether this person is a good fit for the job and for the team. If you decided to hire the person, the questions you ask during the hiring process will reduce your learning curve as a manager on how best to manage this person from day one. Ask yourself, is this someone who would be good at closing the loop.

2. Help them be all that they can be. Everyone has strengths and weaknesses. Find out the real truth with an objective measure. Once you pinpoint the good and the bad, then you place them in the right position and coach them on where to improve. As part of the coaching, stress the importance of closing the loop to your company culture.

3. Take me to your leaders. Work style assessments give the manager and employees a common language about how they like to interact. The assessments can help you train future managers on how to get the best out of the team.

4. Know how to manage difficult people. The number one reason that a loop doesn’t get closed is that a person decided they wouldn’t do it or didn’t know how. Face it, there will always be difficult people, screw-ups and flare ups on the job. Use an objective assessment to understand potential sources of workplace conflict. The best way to deal with a problem is to prevent it in the first place.

5. Get everybody to play nice. Sales and marketing, operations and financial people have to interact to make the company run smoothly. Too many employees get frustrated with other co-workers and just wonder why everyone doesn’t act like them. Through the use of in-depth work style and personality assessments, managers can coach employees how to interact better with peers.

“But you don’t want to overcompensate for people’s strengths and weaknesses so much that you inadvertently create a ‘star system,’” says Oliver. “You really don’t want a lot of prima donnas on the team who won’t touch the grunt work! In the corporate philosophy, it helps to explain the idea of teamwork–everyone helps each other out– and the rewards for it, as well.”

Lastly, if you have hiring responsibility, I believe it helps to look at the team strengths and weaknesses. Maybe today’s glaring weakness can be corrected with one good hire.

In my view, culture trumps strategy every time. So create a culture of closing the loop at your company. Hire with that in mind, coach with that in mind, and communicate with that in mind. Click here for our bonus checklist, Quick Tips for Creating a Closing the Loop Culture.

To read Jarie Bolander’s full article, 6 Steps to Closing The Loop, please visit: http://www.thedailymba.com/2010/02/27/6-steps-to-closing-the-loop/.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2016 This information contained in this article is not meant to be a substitute for professional counseling.

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They also have a full service consulting division that provides domestic and international interpersonal coaching, executive onboarding, leadership training, global options for expanding your business, sales and customer service training, operational productivity improvement, 360s and employee surveys as well as a variety of workshops. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He provides workshops on hiring, managing for the future, and techniques to improve interpersonal communications that have a proven ROI. He is the co-author of the books, Cracking the Personality Code and Cracking the Business Code. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

InBoarding Sets Up Employees for Success

By Larry Cassidy

[dropcaps type=”circle” color=”” background=””]I[/dropcaps]f onboarding is such a great business idea – and it is – why should it be reserved for only new employees? Maybe the time has come to give in-boarding a try.

Onboarding = Success

Onboarding is more than just a solution for employees with the new job jitters. Getting new employees ready to be productive is one of the toughest jobs managers face. Failure to set new employees up to succeed can lead to a slow ramp up to productivity, unhappy new hires, and, ultimately, failure to meet your critical business goals. Rather than recruiting, hiring and throwing employees in the deep end of the pool (“Sink or swim!”), there are much better onboarding practices to increase the worker’s odds of success.

To many a business school professor, onboarding is known as organizational socialization mechanisms. In layman’s terms, this means the ways new employees acquire the necessary knowledge, skills and corporate culture to become effective team members. Think beyond just a simple new employee orientation. The process might include formal lectures, videos, training booklets, computer-based simulations, and even such basic steps as having someone welcome the newcomer and take them to lunch the first day.

This is a far cry from what we called onboarding when I was a captain in the Marine Corps: boot camp. Obviously stress reduction was not on our priority list. While there are no drill instructors at your company yelling at new recruits to drop and give me twenty (at least I hope not), the purpose is the same. You want to prepare newcomers for success in the organization.

More than 80 percent of organizations reported that they have either formal (i.e., written, documented, standard) or informal onboarding programs and/or practices, according to a study by the Society for Human Resources Managers (SHRM). The vast majority of organizations indicated that providing communication, training and resources is extremely important for the successful adjustment of new hires.

So, one in five business leaders are still holdouts, reasoning that traditional human resources orientation sessions are good enough. They fail to see the cost/benefit payoff of investing so much time and energy in the new hires. This is miscalculated reasoning.

Public and private research has proven that onboarding leads to such positives as higher job satisfaction, better job performance, greater commitment to the organization, and stress reduction. Advocates say onboarding does more than shorten the learning curve of new hires. The ultimate payoff is reduced turnover and getting productive workers to increase their tenure at the company.

But Why Just the Newbies?

If you agree with the mounting evidence that onboarding is the way to go, here is an important question: Why wouldn’t you do the same to accelerate the progress of the employees you already have? There is no reason to think that it is too late for the rest of the roster who arrived after onboarding began or have already gone through onboarding.

Consider it inboarding, an extension of the idea of onboarding. The purpose of inboarding is to set existing, rather than new, employees up for greater success. You want the same payoffs: higher job satisfaction, better job performance, and greater commitment to the goals of the organization.

Employees are not set-it-and-forget-it machines. The need for input is ongoing. Many inboarding communications tools and channels can be used to continually get the information across. If onboarding is like an inoculation, then inboarding is like booster shots.

When I was president of a 150-person consumer optical company, I discovered there are two groups of employees that are ideal candidates for what I now call inboarding: all employees and specially selected employees.

All Employees

First, let’s consider all employees. That’s right, all employees. Do you have employees you don’t care if they are successful or not? If yes, I recommend you get rid of the position or get rid of the person in the position (maybe that should be called offboarding, but that is a whole other article). In today’s world of lean companies and global competitiveness, every employee counts.

I am a believer that you help employees be more successful at accomplishing corporate goals if they know what’s going on, where the company is going, why it is going there, what is expected of them, how they can contribute and what the payoff is for them. A leader wants to know the answers to those questions, and so does the entire team.

Treat your employee base like adults who are as interested in the future and success of the company as you are. Here are the tactics that can make inboarding work. Try town hall meetings, roundtable discussions, and even monthly newsletters (just the facts, not the fluff).

Please understand… I am not talking rah-rah, go-team-go cheerleading sessions. This is honest sharing of information. The important news to always stress is where are we going, why it is important, what the opportunities are, what we need from you the employee, and what is in it for you. Bottom line: We get more business, everyone is more secure.

There is an old adage: “If you don’t know where you are going, it doesn’t matter what road you take.” In my experience of coaching more than 300 companies, the information about company success metrics does not easily filter down from the management team and supervisors to the rank and file. People are often in the dark on how they relate to success. Everyone who goes to work wants to go home feeling they accomplished something and that it was important.

Here is one technique I recommend. Set up idea exchange sessions comprised of representatives from various functional areas of the organization. Have them share why they think another area is important. They might make comments like: “Marketing is important because if we don’t have a steady stream of customers we are out of business.” “Operations is important because if we don’t deliver on time that hurts our cash flow and reputation.” “Accounts receivable is important because if they don’t do their job we don’t get paid by customers.” Having that feedback from other people in the organization can really open their eyes to the fact that what they do really matters. They come to work with their heads held a little higher and their focus more intent.

Specially Selected Employees

The other prime candidate for onboarding is specially selected employees who possess high potential for growth. These are the people you know would like to be major players for you as you go down the road. Inboarding can focus on a number of actions to get them ready to become better, rather than pigeonholing them in the job they already have.

Many managers are afraid to groom a high performing employee for promotion, because they hate to lose someone good. Wrong, wrong, wrong. A manager’s job is to grow their people and find the right new person to replace them.

With a small to medium company there can be a challenge to find slots to move a high performer up a ladder. Unlike the days when I was an executive at General Mills, in a small organization there are not as many opportunities for promotion for an up-and-comer.

The solution is for Project work is another inboarding technique. You might say to one of these special employees, “You have a chance to be a manager, but right now we think you are short on finance. So I am going to give you a project that lets you get your nose into the numbers.”get about the vertical ladder and, as proposed by Vistage speaker and consultant, Amy K Hutchins, consider a horizontal ladder. This means moving employees laterally into new and different experiences. Moving sideways can keep the employee fresh (not too different from how the military cross trains its personnel).

Maybe the solution is as simple as cross training. The restaurant chain, PF Changs, took two important actions during the recession. First, they got rid of everything on the expense side that did not enhance the customer’s dining experience. Second, they did a great deal of cross training, which allowed them to reduce head count because kitchen staff could fill in for wait staff and vice versa. More important, morale went up because the employees better understood what it took for the entire restaurant to be successful.

Final Thoughts on Inboarding

Inboarding should be done on a regular, continual basis. If you do it episodically, then the employees tend to look at it as something the leaders do when something is wrong or when you get a big order. Communicating on a monthly or quarterly basis is something to strive for, but not less than every six months.

Don’t neglect the social side. Functions like the company picnic and the holiday party are important. So is the celebration for the big win. In my experience, companies who celebrate victories do better over time.

Breaking bread is also a proven strategy. Regularly take a cross section of employees out for a lunch discussion. If you show genuine interest in your employees, they will know that you care. Then they are more likely to open up to you on what is really going on. Tagalongs are another strategy. Have a younger employee shadow you for some client meetings, lunches and project work.

Overall, the inboarding payoff can be enormous. Never forget, it is the leader’s job to create employee alignment with personal goals, management objectives, and company goals. Inboarding will give you better players and deeper bench strength. Technology is great, but technology doesn’t give you the edge. Business is still about people.

Action Item List

Now it’s time to try out the ideas shared in this article. To receive the specific action items list, please click here and sign up for our Keeping on Track Newsletter:

For more information on how to get an inboarding or onboarding program started, please contact Dana at (310) 453-6556, ext. 403 or dana@lighthouseconsulting.com.

Larry Cassidy is a Senior LCS Consultant and a Chair with Vistage International for the past 25 years. He currently works with some 50 executives every month and has facilitated over 1,200 executive group meetings, and participated in 11,000 face-to-face discussions with chief executives about all aspects of their businesses. He prepared for this journey at Miami University (Ohio) and Northwestern (MBA); as a Marine Corps officer; with public companies (General Mills, Quaker Oats and PepsiCo), private, family and foreign-owned firms; and, in the 1980s as General Manager and CEO of local companies. He does executive coaching and also serves on advisory boards. You can reach Larry at Larry@lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, workshops, and executive & employee coaching.

To order our books, “Cracking the Personality Code” and “Cracking the Business Code”, please go to www.lighthouseconsulting.com.

Prepare Now To Lead The Way Into 2014

By Paul David Walker

[dropcaps type=”circle” color=”” background=””]S[/dropcaps]pring time is upon us and it is time for house cleaning and planning. Many of you are familiar with the economists, Alan and Brian Beaulieu and how their economic forecasting helped in preparing for the last recession as well as for the financial impact that it had on most companies and individuals. They have presented another opportunity for us to be aware of in the coming future. They are projecting that sometime between the later part of 2013, we will be heading into another much milder recession that will continue through 2014.

Leadership – Take Market Share Now

During economic changes, relationship is more important than ever, because it is relationships that will hold you, your customers and vendors together.

Together, you can increase market share. If you, your customers, and vendors survive and / or thrive during weak demand, you will rise together as demand increases, which it always does. Here is how you do this.

Recession Value Proposition

Adjust your value proposition to fit the new economic circumstances, and train all people who interact with customers to implant this in the minds of customers. For those of you who are in the B to B space, at some point in time your customer will be in a meeting with corporate leaders asking, “What vendors can you eliminate? How can we reduce our costs and be more appealing to our customers?” At that time you want the voice in the back of your customer’s head to be saying that your company is a keeper for the reasons you have implanted. Likewise, if you sell to the consumer, you want the consumer thinking that your products will help them live better in this economy. The consumer advertising, packaging and PR should be positioning your brand as the answer. Your new value proposition should to targeted and ever present.

One of my B to B customers mission is to provide “Engineered Solutions” that improve the efficiency of their client’s factories. They explain, “We will work with flexibility and expertise.” They are making sure all their customers have this on the top of their minds. Another client, who sells to consumers, vision statement is: “Better Products … Better Life.” They are sure their advertising drives home how their products provide twice the value at lower prices. They are working on getting this message into the scripts of their customer service teams around the world. The most successful businesses during a recession implant their new value proposition at every contact with customers. This makes the relationship strong, and creates hesitation before a customer changes brands. That relationship will benefit all as the tide rises.

Extend Your Team

Make it clear to your vendors and customers, that we are all in the same boat floating on a low tide of demand, and that we must work together for mutual success. Continuously reach out to customers to understand their changing needs and wants and make temporary deals with the customers and vendors that will carry all through changing economic dynamics. If your customer needs a price break, ask your vendors to reduce their prices. If they need to reduce their inventories, get your vendors to help you create just-in-time inventory programs. Find out what your customers and vendors need to help their business prosper, and have the flexibility to change your products or services to fit. Do not get stuck in business as usual. Business as usual will be a death sentence. Build a community of strong relationships with your customers and vendors.

Talk about your mutual missions and synchronize them so all can succeed during economic change. Make it clear to all that you and your company are committed to mutual success. Let them see and feel your commitment to mutual success.

Attack Weak Competitors

As your competitors fail to adapt to the changes in the wants and needs of the market place, their customers will be moving. Be sure they move to you. Conduct research to determine your competitor’s weaknesses and focus on acquiring their customers, who will be frustrated with those weaknesses. If your value proposition is right, and being communicated in the market place at every point of contact, they will come to you. The most venerable competitors have the following weaknesses:

Overextended credit
Old technology
Cash flow problems
Poor customer service
Inability to adjust prices
Lack of flexibility

Once you understand the nature of the weaknesses of your competitors, select the three weakest and develop a strategy to acquire their customers.

Position yourself as the life raft for the customers tied to a sinking ship. People in corporations tend to change at a slower rate than people in the market. Be ahead of the wave of change and find competitors who are not.

Business has always been driven by relationship and trust. During high demand it may not be as important because of the lack of supply for surging demand.

During economic and social change when demand is falling, relationship and trust are even more important.

If you have ridden the wave of demand, maximized your profits and weakened your relationships, it is past time to change, but never too late. Do not hesitate, find and communicate the correct value proposition for your business, extend your team to include customers and vendors, and rescue customers from the sinking ships of your competitors.

Final Thoughts

According to Dana Borowka, CEO of Lighthouse Consulting Services LLC and author of Cracking the Personality Code (www.lighthouseconsulting.com), hiring the right people is key to future growth. If you would like additional information on raising the hiring bar, please click here to see an article on this subject.

In our blog, we are sharing more specific ideas in these various areas. If you have any specific questions, please feel free to contact any of our consultants. Also, if you have additional topics that you’d like us to address either in our Keeping On Track publications or Open Line monthly web conferences, please let us know. We look forward to hearing from you.

Paul David Walker is a Senior LCS Consultant and one of the few CEO coaches who has worked with numerous Fortune 500 CEOs and their key staff members for over 25 years along with many mid-cap organizations. Some of the organizations that Paul has worked with include StarKist Foods, Von’s Grocery Stores, New York Life, Anne Klein, Rockwell International countless manufacturing, global utilities, service and consulting organizations. Paul is the founder of Genius Stone Partners, and works with domestic and international companies to improve their bottom line today and planning for the future. Paul is the author of the best selling book, Unleashing Genius and his new book, Invent Your Future – 7 Imperatives for a 21st Century. You can reach Paul at Paul@lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com and our website: www.lighthouseconsulting.com

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, workshops and executive and employee coaching. To order our books, “Cracking the Personality Code” and “Cracking the Business Code”, please go to www.lighthouseconsulting.com.

Planning For The Upcoming Recession!

By Larry Cassidy, Ted Margison, Paul David Walker

[dropcaps type=”circle” color=”” background=””]S[/dropcaps]pring time is upon us and it is time for house cleaning and planning. Many of you are familiar with the economists, Alan and Brian Beaulieu and how their economic forecasting helped in preparing for the last recession as well as for the financial impact that it had on most companies and individuals. They have presented another opportunity for us to be aware of in the coming future. They are projecting that sometime between the later part of 2013, we will be heading into another much milder recession that will continue through 2014.

We thought that we’d share some ideas from our Lighthouse Consulting team, so that you and your organization can begin to prepare and take advantage of the opportunities that could be just around the corner. We’re going to focus in on management, leadership and operations:

Management – Larry Cassidy

I would start with the following caution: whenever times get even a little better, it is an invitation for overhead creep. Put another way, a little bit of success invites a lot of overhead. Given that truth, and the fact that many businesses have experienced at least somewhat better times, it is likely time to grab the pruning shears.

First, I suggest this process: go through every expense on your P&L, and ask the following questions: “Does this expense truly touch our customer and/or make his/her experience better? If not, is it at least critical to our future success?” Prune any expense which does not meet one or both tests.
Second, take a stethoscope to your balance sheet. Get rid of bad inventory (it is rarely a “too much” thing, usually a “wrong stuff” thing). Your first loss is your best loss. Move it! Then get on and stay on your receivables. Both need to come down and cash needs to go up.
Third, be sure you have top people in key positions. You will ask more out of the team in tougher times, so be sure you have quality and you trust the players. Then have the team cross-train all hands. Every employee should be able to do at least one back-up job adequately. This creates flexibility and can reduce headcount.
Finally, make sure your critical systems are operating smoothly. The last thing you will want to do is have to plug “holes” with bodies.

Leadership – Paul David Walker

Take Market Share Now

During a recession relationship is more important than ever, because it is relationships that will hold you, your customers and vendors together.

Together, during a recession, you can increase market share easier than increasing profits. If you, your customers, and vendors survive and / or thrive during weak demand, you will rise together as demand increases, which it always does. Here is how you do this.